Last time I wrote about “showing your work” in the loan origination and servicing processes. A colleague of mine used that phrase to summarize the various regulatory changes in the industry. He was referring to a lender or servicer’s need to show what they’ve done, and how they’ve done it. Showing every step in the loan lifecycle creates a transparency in the process that is beneficial for everyone involved.
How do you really do that, and manage it so it is accurate, usable information? With technology advances, we can literally save a record of every interaction—whether by phone, email, text, or in person—that takes place during the lifetime of a loan. The question really becomes: How do we best catalog this information, give it context, and enable it to be easily exchanged between a company’s internal systems and with external downstream systems so it retains maximum usefulness for various purposes?
For example, is it critical to capture the fact that I spoke to borrower John Smith on 3/6/13 at 1:04 p.m. EST to review loan rates A, B, C for loan products X, Y, Z with him, if he didn’t choose one to lock in? Yes, especially if rates increase the next day and he says then he thought he told me to lock him in yesterday. (In my experience this can happen with any borrower, especially when you quote rates to them for days on end!)
There are many variations of this scenario that take place every day, for every step in the loan origination and servicing lifecycle. And it’s not just between borrowers and lenders, but between lenders and appraisers, lenders and closing companies, servicers and borrowers, servicers and their service providers, etc.
Good communication is all about the sender and the recipient agreeing that they exchanged information and what that information was. Technology provides us with the neutral facts of reality—not my memory of what happened yesterday, or the other person’s memory. The beauty of exchanging information electronically is that not only does it capture the text (or interest rates) exchanged—but it also captures when and how it was sent, and what the recipient did with it.
When it comes to information that is exchanged solely in electronic format, it’s critical to retain both the content and all of the contextual information generated about it. Contextual information (or as I sometimes call it, meta-data) may include date and time stamps, IP addresses, workflow events and triggers, digital signatures including the information needed to check the signatures, and more. There are some standards for this in the mortgage industry specifically (MISMO Document and SMART Document) and some generic standards for it, too. Regardless of your preference of standards, both the content and the context need to be maintained cohesively.
Mortgages are evolving into a comprehensive collection of parseable data for various purposes by all parties—lenders, servicers, investors and auditors. As you expand your use of electronic documents (esigned or not), make sure you are capturing and storing all of the audit trail information and can generate that as output to other systems, whether internal long term archives or external systems such as investors.
Kim Weaver has been in mortgage banking and related industries for over 20 years, performing and managing origination, processing, underwriting, secondary marketing, closing, loan delivery, insuring and servicing. She works in lending solutions at Fiserv, where she is the product manager for the secure lending platform which provides paper-free lending capabilities. She can be reached at
